Understand the telecommunications services and effectively manage the costs of those services. We explains in nontechnical language the most common telecom technologies and services in today’s marketplace. These services fall into four categories: local, long distance, data, and wireless services. Each service offering has its own unique type of bill.

Digital Subscriber Line (DSL)

DSL (digital subscriber line), cable modem, and other high-speed technologies should be considered in areas where they are available.

DSL services are growing rapidly as local access carriers continue to install DSL access modules ("DSLAMs"). Most service providers break down their DSL services into three main categories: residential, SOHO (small office/home office), and enterprise. ADSL (asymmetric DSL, where up- and downstream speeds differ) appears to be the offering of choice for residential customers, while SDSL (symmetric DSL) is usually marketed to businesses because it has T1 or more speeds both ways.

Depending on the geographic location, installation time for DSL circuits can range anywhere from one week to over ten weeks. Quality of service (QoS) is an issue. Most service providers, because of the multiple risk factors, do not guarantee QoS with DSL service. For example, DSL can potentially be unavailable for a few hours or longer. However, unlike cable, DSL provides consistent bandwidth to the user and does not depend on how many other (unrelated) customers are using the service at any one time.

DSL, more prevalent than cable modem, has a number of potential advantages:

Internet access for smaller offices.

Backup Internet connection. Many organizations implement DSL as a fail-over device because it is so inexpensive compared to a T1. Although costs vary by provider, a business typically pays at least twice as much and sometimes three or four times as much every month for a T1 line as it would for DSL. In other words, for the cost of a single T1 1.54 Mbps connection, three 1.1 Mbps DSL connections can be supported.

Primary connection for the Internet and data services (note: many organizations do not consider DSL sufficiently robust for their primary link, but if cost is the primary consideration, DSL will provide the necessary functionality).

Decreased installation charges. Typically, installation costs for a T1 line are three to four times as much as installation and setup of DSL services. DSL uses traditional telephone lines as opposed to T1, which requires installation of special (conditioned) lines.

Multiple pricing categories. Depending on needs, more or less bandwidth (line speeds) can be purchased (if available in the area).

Combined data and voice services over a single connection (for small offices). Although not yet widely deployed, Voice-over-DSL (VoDSL), shown in Exhibit 1, is starting to be implemented in selected locations in the United States, such as Santa Clara, California, and Boston, Massachusetts. By combining multiple voice channels and data on one copper wire, local telecom companies can offer a competitive package to small businesses that need only Internet access and a few voice lines. Jim Greenberg, chief architect at Rhythms NetConnections Inc., estimates small businesses could save about 30 to 40 percent on additional voice lines and get it all from one company.

Exhibit 1: Voice-over-DSL (VoDSL)

An "always-on" technology, unlike ISDN, which requires a sign-on.

More secure than cable modem, because the bandwidth is not shared with other users (due to DSL's copper wire to the user legacy ar architecture — dedicated to a single user).

Disadvantages include:

DSL installation, while generally faster and cheaper than T1 or T3 installation, may experience technical problems. DSL runs over lines designed prior to World War I. It was originally intended to carry only miniscule traffic. For such a scrawny system to shoulder mountains of Internet data is akin to one writer's quip about a dog walking on its hind legs — "It is not done well, but you are surprised to find it done at all." Exhibit 2 shows an analysis of the percent of DSL installations completed versus time required for the install.

Exhibit 2: DSL Installation History: Percentage of Installs over Time of Order

Multiple parties are involved. Typically, when a local telephone company, ISP, and possibly a DSL provisioning company are involved at some point in providing the service, the potential for billing errors and increased repair time is greater.

DSL bandwidth varies considerably. The distance from the POP largely determines the bandwidth that is available to a DSL customer. The distance limitation is usually considered 18,000 feet but "loop extenders" from companies like Symmetricom can extend the distance considerably. Exhibit 3 shows the relationship between bandwidth and distance from the central office.